The pair GBP/USD continues to decline. Yesterday, the price of the British currency fell to the level of 1.5353. Downtrend was caused by overall strengthening in the USD. Last Friday, the head of the US Fed said that if economic growth in the U.S. continues, the regulator will increase interest rates this year. A speech by Mrs. Yellen made investors believe that the American monetary policy will become more stringent in the near future.
In addition, the USD is supported by positive macro-economic statistics. According to the agency Standard & Poor’s, housing price index rose by 5% versus expectation of 4.6%. The number of sold new houses has increased from 484 thousand to 517 thousand, while the forecast was only 510 thousand. However, the main driver of the rise in the USD was the increase in the consumer confidence index, which rose from 94.3 to 95.4 points, against analysts’ expectations of 95 points.
Today, we do not expect important macro-economic news, which can affect the GBP or the USD. Nevertheless, in the current situation the British currency is still under pressure, which can trigger sales.
Support and resistance
Resistance levels: 1.5476 (middle line of Bollinger bands), 1.5600 (psychologically important level), 1.5700 (highs of 21 May), 1.5814 (highs of 14 May), 1.5900 (moving average with the period 200).
Support levels: 1.5340 (Fibonacci retracement of 38.2%), 1.5190 (Fibonacci retracement of 50%), 1.5100 (psychologically important level), 1.5040 (Fibonacci retracement of 61.8%).
Long positions are advisable after breakdown of the level of 1.5480 with the first target of 1.5600 and the next one at 1.5700. Protective orders can be placed at 1.5440. Sell positions are recommended at the level of 1.5340 with the targets of 1.5250 and 1.5190 and stop-loss at 1.5380.